Wall St The Week Ahead: Investors await Fed’s minutes and jobs data

INVESTORS in US stocks will be looking to Washington this week, awaiting key jobs data and minutes from the Federal Reserve’s most recent meeting, when it decided to cut its unprecedented monetary stimulus.

Minutes from the Fed’s 17-18 December meeting, when the central bank announced its plan to reduce monthly asset purchases by $10bn to $75bn, could give further insight into the reasons behind the decision and offer clues about how quickly the Fed will wind down the stimulus.

But investors will be anxious to see whether that strength is also seen in the December US payrolls report, due on Friday. The Fed has tied its policy in part to jobs data. In its December announcement it said it is “likely will be appropriate” to keep overnight rates near zero “well past the time” that the US jobless rate falls below 6.5 per cent.

US employers are expected to have added 197,000 jobs in December, down slightly from the 203,000 jobs added in November, according to a Reuters survey. The unemployment rate is expected to remain at a five-year low of seven per cent.

Besides the payrolls data on Friday, a report on the US services sector is due out today, as well as a report on durable goods orders.

Investors also will be keeping an eye on the first results from the upcoming earnings season. Results from Alcoa and Monsanto are both due next week. The pace of companies reporting isn’t expected to pick up until next week, when some banks are due to report, including JPMorgan Chase & Co.